Presenting on a panel at ifa’s Adviser Innovation Summit earlier this month, Rekab Advice chief executive Amie Baker and Aware Super’s head of portfolio management, Simon Warner, discussed strategies to ease client stress.
Baker said it’s important for advisers to be open with clients, allowing them to see how the service they provide will add value to their lives.
“It’s about actually having a conversation with the client to explain what the outcome and the goal is but bringing it back to their outcome goal as well,” she said.
“We’ve got to make sure that the client understands; what is their objective and is this portfolio going to help meet their goals. So the long-term picture here and why we created the portfolio we’ve got.
“It’s something you constantly have to repeat back to them and always bring it back to their why and their long-term picture. Making sure that the risk profiling is in line and they’re in line with their goals and values as well.”
By continuing to educate and communicate openly with her clients, Baker said she has reduced the amount of concern from clients when market changes occur and impact their investments.
“We also bring in layers of education throughout the ongoing process. We give our clients market updates, we get to them things that will get them prepared,” she said.
“It is repetitive, but the feedback we’re getting is the more we’re sending this information out over the years, the clients have become more engaged in understanding what’s going on with their portfolio and we haven’t had anyone push back or question when the performance hasn’t been fantastic. It’s been great because they fully understood it.
“So I think best practice, in my opinion, is just open communication, and getting them on the phone if they’ve got a question, if they’re worried.”
Baker also noted that education can also be a “double-edged sword”, particularly for new clients who are just beginning to learn about their finances, causing them stress when changes occur. However, she said that open communication can also help them through those anxieties as their financial literacy improves.
Warner explained that through open communication, advisers can help reduce client stress levels and build trust.
“The best image I can come up with is that we sell cortisol suppressants. We try to stop people from stressing. And we do that partly through communicating,” Warner said.
“And if we can get people to just chill out and trust the system, in an environment where the system doesn’t really earn much trust over decades, you’re selling happiness as a result.
“But it requires a combination of the science of portfolio construction, but then obviously the art of communication in the art of engagement.”
